Challenges in the Adoption of Information Technology at Sunrise Industries: The Case of an Indian Firm

IDEA GROUP PUBLISHING Challenges in the Adoption of IT at Sunrise 457 701 E. Chocolate Avenue, Suite 200, Hershey PA 17033-1240, USA Industries IT5716 Tel: 717/533-8845; Fax 717/533-8661; URL-http://www.idea-group.com

Challenges in the Adoption of Information Technology at Sunrise Industries1: The Case of an Indian Firm Monideepa Tarafdar University of Toledo, USA Sanjiv D. Vaidya Indian Institute of Management Calcutta, India

EXECUTIVE SUMMARY This case is based on Sunrise Industries Limited, one of the oldest manufacturers of industrial hydraulic cylinders and gears in India. It describes the evolution and progress of the use of IT in the company over time. The case highlights the effects of external factors such as regulatory changes and industry structure on IT investment and the IT applications portfolio. It illustrates the role of internal factors such as leadership attitudes and end user characteristics on the organisational focus towards IT. It also demonstrates the influence of IS professionals on top management and line managers, and their consequent role in steering the nature of IT deployment. This case is significant and interesting because the experiences of Sunrise Industries are representative of those of many other organisations from different industries in India, in the wake of economic This chapter appears in the book, Annals of Cases on Information Technology 2004, Volume 6, edited by Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written Mehdi Khosrow-Pour. Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic permission of Idea Group Inc. is prohibited. forms without written permission of Idea Group Inc. is prohibited.

458 Tarafdar & Vaidya

liberalisation in 1991. Indeed the findings can also be generalized to companies in other developing countries.

ORGANISATION BACKGROUND Introduction Sunrise Industries Limited (SIL) was a manufacturer of industrial hydraulic cylinders and tipping gear equipment. It was a family owned business, established in 1967. Its production facilities were located in eastern India. The company manufactured three main products. The first, the tipping gears, were used in dumpers and tipper trucks, which were used to pick up, transport, and dump materials like soil, construction material, and garbage. These formed 60% of the company’s total business. They were produced to bulk orders, against standard specifications. The second kind of products, the hydraulic cylinders, formed 30% of the total revenues of the company. They were used in dumpers, earthmoving equipment, excavating equipment, bulldozers, cranes, and steel rolling mills. They were made to order, and were one-off products. Hydraulic cylinders and tipping gears were sold to large automobile manufacturers in the Indian light and heavy automobile industry. The third kind of products, the mining pit props, formed the remaining 10% of the company’s revenues. These were hydraulic equipment used in coalmines in eastern India and were sold to mining equipment manufacturers. These customers were typically government organisations, which ordered in bulk and at fixed rates. The demand for mining pit props was seasonal, for three months during a year, to coincide with the mining season in the coalmines of eastern India.

Organisation Structure SIL had 350 employees at the time this study was conducted. The corporate office and the manufacturing unit of SIL were located in eastern India. The organisation structure is shown in Figure 1. The Chairman was the executive head of the operations and belonged to the family that first started the company. He was advised by the Deputy Director, who was in charge of the overall operations of the company. There were five departments, each responsible for the Marketing, Production & Quality Assurance, Finance, Systems, and Technical Development functions. The Purchasing, Stores, and Dispatch functions formed sub-departments that reported to the Finance department. The Marketing department was also responsible for the After Sales Service and Spares Management functions. Each of the five major departments was headed by a General Manager or Manager who reported to the Deputy Director. The operations were highly centralized. The Deputy Director, who supervised the day-to-day operations of the company, was the executive head. For instance tactical parameters, such as the daily production figures and working capital levels, were decided by the heads of the different departments, and then supervised and approved by the Deputy Director. Similarly, decisions based on marketing forecasts, such as annual production plans, and product promotion and advertising campaigns, were also closely monitored by the Deputy Director. Finally, resource allocation decisions, process change decisions, and technology implementation decisions were also approved by her, after she had studied the

Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Challenges in the Adoption of IT at Sunrise Industries

459

Figure 1. Organisation Chart Chairman

Deputy Director

General Manager (Finance)

Manager (Purchase

Manager (Production & Quality Assurance)

Manager (Stores)

Deputy General Manager (Technical Development and R&D)

General Manager (Marketing, After Sales Service and Spares Management)

Manager (Systems)

Assistant Manager (Dispatch)

Junior departmental executives

proposals of the individual department heads. The managers and departmental heads were expected to follow the instructions of the Deputy Director.

Products and Processes—A Brief Description The three products that the company manufactured were broadly similar in terms of the basic product technology. Within each of the three categories, there were variations in dimensions and other technical specifications like strength and maximum permissible payload. However the design and production processes for each variety were almost identical. The company had 35 regular suppliers and 200 intermittent ones. SIL had the capacity to produce about 1,000 sets of tipping gears and 250 hydraulic cylinders every month, and 3,500 mining pit props every year. The products were distributed to customers in all parts of India, through a network of marketing and distribution offices. The central marketing office was in Calcutta, with five marketing offices in different parts of the country. The marketing offices were responsible for supervising a network of 30 dealers all over India. The products were distributed and sold through these dealers. Even though the company had customers all over the country, most of the orders were bulk orders, and the number of individual customers was not very large. Three major customers accounted for 60% of the business. Furthermore, large repeat orders were responsible for 50% to 80% of the company’s business. Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

460 Tarafdar & Vaidya

Critical Success Parameters There were four critical success parameters for performance in the industry. The first aspect was that of customer retention. This was an important aspect of the operations of SIL because repeat orders were responsible for a large component of its revenues. Moreover, with the products being industrial rather than retail, there were fewer customers and individual orders amounts were large. Hence the loss of a specific customer resulted in the loss of significant revenues. The second critical aspect was product quality. This was so because customers belonged to industries that were ancillary to the automobile manufacturers in India. They were Original Equipment Manufacturers (OEMs) for parts that were used by the automobile manufacturers (refer to Figure 2). Most of these OEM manufacturers had to manufacture according to accepted quality certification procedures such as ISO 9000, so that they could sell to the large automobile manufacturers. Their success in the market depended on an established brand name and recognized product quality. Since most of the customers of SIL were these OEMs, the product quality of the automobile ancillaries, and ultimately the automobile itself, depended on the quality of SIL’s products. Hence quality was an important success parameter for SIL. Delivery of products on schedule was the third critical part of the company’s operations. This was important because SIL formed the upstream part of the automobile manufacturing value chain (refer to Figure 2). SIL’s products were therefore used in the operations of the automobile ancillary companies, further downstream. Any delays in delivery could potentially jeopardise the production schedules of successive levels in the value chain and hence in the delivery of the finished automobile and hydraulic products. The fourth important aspect of the company’s operations was concerned with the easy availability of spares and adequate post-sales technical support to customers. This was because all three products were industrial products that required extensive aftersales servicing. Technical expertise in service and spares management were therefore used as differentiators among manufacturers in the industry.

Figure 2. Automobile Industry Value Chain

Sunrise Gears Limited and other similar companies

Original Equipment Manufacturers:

Automobile Manufacturers

š š š š š š š

š

Engine Parts Transmission Steering Suspension/Braking Electrical Equipment External Fixtures Others

š

Light Motor Vehicles Heavy Motor Vehicles

Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Challenges in the Adoption of IT at Sunrise Industries

461

These critical success factors determined the relative importance and criticality of different processes and functions within the company. The first and fourth critical parameters implied that the marketing, after-sales support, and spares management functions were critical to the operations of the company. Product quality, the second important parameter, led to the manufacturing and quality assurance functions as being critical. Finally, the third critical parameter implied that inventory management, production planning, and scheduling were crucial aspects of SIL’s activities.

SETTING THE STAGE (1984-1990) External Environment and Industry Structure India’s automotive ancillary and component industry manufactures the entire range of parts required by the domestic automobile industry for various vehicles including cars, jeeps, light and heavy commercial vehicles, tractors, two wheelers, and three wheelers. The industry consists of multiple levels in the value chain. The total domestic production of auto-components during 1999-2000 was estimated at approximately Indian Rupees (INR) 126.8 billion (US$2.95billion2). The industry registered a compound annual growth Table 1: Segment-Wise Concentration in the Ancillary Industry in India (Source: Automotive Component Manufacturers Association) Segment

Engine and engine parts

Number of Manufacturing Units (1999-2000)

Production Value (INR billion)

99

32.53

62

20.05

28

16.69

24

6.7

38

5.83

23

17.54

Pistons, piston rings, piston pins, gaskets, carburettors, fuel injection pumps, etc. Drive transmission and steering parts Transmission gears, steering gears, crown wheels and pinions, axles, wheels, etc. Suspension and braking parts Leaf springs, shock absorbers, brake assemblies, etc Electrical equipment Spark plugs, starter motors, generators, distributors, voltage regulators, flywheel magnetos, ignition coils, etc. External fixtures Dashboard instruments, headlights, horns, wipers, etc. Others

Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

462 Tarafdar & Vaidya

Table 2: Figures for Revenues and Profits for Sunrise Industries Year

Revenues (INR million)

Profits (INR million)

1987-88

120

7

1988-89

125

7

1989-90

180

10

1990-91

Not available

Not available

1991-92

250

10

1992-93

280

12

1993-94

300

38

1994-95

450

45

1995-96

600

92

1996-97

600

46

1997-98

450

25

1998-99

350

28

rate of 19.5% between 1994 and 1999. An interesting aspect of the industry is that each component used to make an automobile constitutes an independent segment in itself. The Automotive Component Manufactures Association (ACMA) classifies the auto ancillary industry into five product segments, depending on the function of the manufactured part (refer to Table 1). SIL belonged to the second industry segment, that is the Drive Transmission and Steering Parts segment, and hence we shall restrict our discussion of the industry structure to this segment. In addition, SIL also manufactured mining pit props and tipping gears, which were sold to heavy equipment manufacturers. Worldwide, the hydraulic equipment industry had been a stable one. There had not been any major technical breakthroughs in product or process technology since the 1970s. Neither had there been any significant changes in the structure of the industry in terms of mergers or acquisitions. Domestically also, the industry structure remained stable from 1967 until the late eighties. There were significant economic regulatory barriers, which prevented the entry of new competitors. The industry was tightly controlled, like most other sectors of the Indian economy. SIL was the largest and oldest player in the industry and functioned in a monopoly market. There was virtually no competition from anyone else and it was the only major producer of hydraulic equipment in the country, and the market leader in its segment (refer to Table 2, for relevant financial figures). In fact the demand for the products of SIL was so great that delivery times as long as six to seven months were acceptable to its customers. At the same time, the overall size of the market and the quantum of demand were linked closely to the state of the economy as a whole. For instance, the tipping gears and mining pit props were used in equipment that was related to construction and building Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Challenges in the Adoption of IT at Sunrise Industries

463

activity, the demand for which in turn were directly related to the state of the economy. Similarly, the hydraulic cylinders were used in light and heavy automobile equipment, the sales of which were also linked to growth in the economy. Till the late 1980s, the demand for the different products of SIL was stable because there were no drastic changes in the economy, and the demand for construction equipment and light and heavy automobiles continued to increase at a steady pace. The company was the dedicated supplier for many original equipment manufacturers. Hence steady orders were received yearly and the offtake was more or less stable. There was not much competition and orders were assured. There was a slowdown in the automobile segment of the Indian economy from 1997 to 2000. Consequently, auto ancillary players were hit hard. This resulted in lower capacity utilisation for SIL and other manufacturers in the industry.

Process Description and Information Processing Requirements The company manufactured standard products, with standard specifications that were constant for specific customers and did not change drastically very often. The inputs consisted of steel rods, cylinders, seals, rings, nuts, metal casings, and pistons. There wasn’t much variation between the different varieties of products within the same product range. The manufacturing processes were inherently simple and hence the tasks related to the production process were standard and routine. There were separate production facilities for tipping gears and cylinders. The production processes for both were standardised assembly line processes, all steps of which were documented and specified. The basic work consisted of cutting, boring, honing, polishing, coating, painting, and assembly, all of which were repetitive, mechanical tasks. The planning activities were also structured and simple. This was possible because the number of individual customers was limited and individual orders were large. For example, 80% of the customers gave yearly orders with a two-month delivery schedule. The average lead-time for tipping gears was one month, and that for hydraulic cylinders was three to six months. On the input side, some of the components had to be imported, and the lead-time was six months. Orders for these components were placed every six months. Seventy percent of the input components were, however, procured locally and had lead times that varied from one month to two days for vendors. Orders for these components were placed every two months or every week, depending on the lead-time. Demand was fairly stable and was calculated at the beginning of every year. Overall there was enough slack in the system in terms of inventory. Also the lead times were fixed; there were few sudden changes in delivery times. From the above description, it is clear that the company’s operations were such that the information uncertainty (Galbraith, 1973) and equivocality (Weick, 1979) were low. This is because the tasks were inherently simple and structured, and hence easy to automate. According to a middle manager in the production department who had been with the company since 1988, the information processing requirements were repetitive and not very complex. His observation was: “We have standard information processing requirements. We calculate roughly the weekly production schedule at the beginning of each month. There are only two kinds of broad products and limited number of raw materials. The Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

464 Tarafdar & Vaidya

information processing activities related to the production processes are simple and can be easily automated.”

Organisation Characteristics SIL was a traditional and conservative family owned business, and the Chairman and the Deputy Director were members of the family that owned the company. It was conservative because there was no business drive within the company, and proactive strategic decisions were not taken. For example, because the market conditions were comfortable and the company was the monopoly producer, customers were willing to buy whatever the company could manufacture. SIL on its part was happy to serve whatever orders it could get. It did not make any significant investments for research and improvement of quality standards. Nor did it make any innovative attempts at segmentation, marketing, and customer relationship management. Consequently, it was not able to satisfy specific requirements of different customers. Some parts of the market were not being catered to, and there was definitely a good portion of the demand that was not being met. As one of the senior managers, who had been with the company for 20 years, remarked: “We had no idea of what was it that our customers actually wanted. We assumed that they wanted whatever we could make.” Since the decision-making structure was centralized, the final decisions were left to the Deputy Director, who preferred to look into the operational details as well. The managers and departmental heads followed instructions that were given to them, and there was no scope for ambiguity in the day-to-day operations of the company. There were standard norms for communication, and information regarding orders, inventory, and delivery status were centralized with the Deputy Director and readily available. One of the managers in the production department observed the following: “All our processes are standardised and routine. We have standard operating procedures and our employees know exactly what to do. Moreover, we receive clear instructions from our superiors.” As is clear from the above description, top management was traditionally against automation and modernisation, which included IT-based modernisation. Moreover, the decision-making and management control mechanisms were highly centralized, with information being reported by the line managers to top management, who served as a single point for most of the critical processing activities. This ensured that as long as they were satisfied with the existing information processing capabilities of the company and were able to perform their information processing functions, they preferred not to introduce IT-based information processing capabilities. Such systems of information processing and control are often used by organisations (Tarafdar & Vaidya, 2002). Top management attitude has been widely cited as one of the major drivers of IT adoption in organisations (Dvorak, Dean, & Singer, 1994), and the greater the top management support for IT, the greater the probability that new IT applications would be developed (King & Thompson, 1994; Sutcliffe, 1999; Premkumar & Roberts, 1999). It has also been Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Challenges in the Adoption of IT at Sunrise Industries

465

found that organisations where IT innovations fail to materialize are characterized by top management that is reluctant to support and provide resources for the acquisition of IT (Delbecq & Mills, 1985). In developing countries also, top management attitude has been a significant driver of IT adoption (Tarafdar & Vaidya, 2001, 2002). Similarly, the acceptability towards IT was low also among the managers and shop floor workers. During this period there were 800 employees: 70% of them were semi-skilled shop floor workers, and 25% were clerical workers who performed low-skilled tasks. On the whole most employees had no idea of what it was like to work with computers and were indifferent towards the use of IT. In this connection, studies in the domain of IT adoption suggest that IT acceptance and innovation at the grassroots levels in the end user units are crucial to the adoption of IT by an organisation (Rockart, 1988; Vaidya, 1991; Agarwal & Prasad, 1998; Nambisan, 1999). It has also been demonstrated that the age and qualifications of employees are crucial determinants of the extent to which they would be willing to adopt IT (King & Thompson, 1994). In this context, in many developing countries, IT is seen to be the cause of reduction in opportunities for employment, and there is a hostile attitude toward IT adoption and acceptance, not only at the level of semi-skilled and unskilled employees, but also by middle management. This has been a crucial factor in the introduction and management of IT in developing countries (Jantavongso & Li, 2002; Tarafdar & Roy, 2003).

IT Adoption During this Period These conservative and risk-averse attitudes were reflected in the IT adoption characteristics within the company during this period. Until 1991, there were no computers in the company. This was similar to many companies in other industries in India, which used structural means such as centralized information processing to facilitate their operations (Tarafdar & Vaidya, 2002). Transaction-based activities such as payroll processing and accounting were carried out manually, and records were kept on paper. Ledgers and financial documents were also reconciled manually. Materials procurement, production planning, and inventory management were based on the demand forecast for the year. The forecast figures were calculated jointly by the heads of the Marketing, Production, and Finance departments, on the basis of figures for past demand, production capacity, financial and technical resources, and their knowledge of the market and the industry. The process was largely manual and qualitative, in that no modelling or spreadsheet tools were used for the purpose. Indeed, the production manager stated that “the forecast figures are based largely on our gut feel of what we perceive the demand to be.” The figures calculated by the departments were thereafter approved or changed by the Deputy Director. Once she ratified the final figures, these were used as the basis for all the other functions of the company.

Impending Changes During the years 1992 to 1994, the industry structure underwent significant changes. This was a consequence of the general economic liberalisation that took place in India, starting in 1990-91. The regulatory entry barriers for the hydraulic equipment and other automobile ancillary segments were lifted, and new competitors entered the market. The company’s turnover, which had increased by 20% from the late ’80s to the early ’90s, started decreasing, and decreased by 33% between 1997 and 1999 (refer to Table 2). There Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

466 Tarafdar & Vaidya

was pressure on margins, and market share and profits decreased. The desired emphasis was on manufacturing products of better quality at lower costs. The early ’90s were marked by major cost-saving exercises. The number of employees was reduced from 800 in the late ’80s to 600 in 1995, and to 350 in 2000. These changes were also accompanied by adoption of IT, initially in a limited manner, but later on a large scale. The next section describes the external and internal changes that resulted in the adoption of IT by SIL.

CASE DESCRIPTION (1991-2000) The case description consists of two distinct phases in the history of SIL. The first phase was characterised by drastic changes in the competitive and regulatory environments. This led to requirements for belt tightening and cost reduction. The company developed its first IT applications during this stage. The second phase was marked by a change in the structure of the IS organisation. This resulted in a significant change in the interfacing relationships between the IS professionals and the rest of the organisation, and considerable increase in the importance of the IS department. Consequently the nature of the IT applications also changed. Each of the two stages had distinct characterises as far as the IT applications portfolio and IT management strategies were concerned. These characteristics illustrate the effects of various internal and external factors on the nature of IT adoption at SIL.

PHASE ONE: CHANGES IN THE COMPETITIVE ENVIRONMENT (1991-1995) External Changes With the liberalisation of the economy, the environmental conditions changed and external pressures increased. In 1992, as a consequence of economic liberalisation, the government allowed licenses for foreign companies to directly enter the market and manufacture hydraulic gears and tipping gears. They were also permitted to enter into collaboration with Indian companies, and set up marketing and distribution agreements for the import and sale of semi-finished products. In 1993-94, the government lifted a number of additional regulatory barriers. Whereas earlier, technical backup and support capabilities were required to manufacture and sell these products, this restriction was now lifted. It was possible after 1993 for companies to import and sell these products without setting up an after–sales service network. Additionally there were other macroeconomic changes as a result of the new financial policies. The devaluation of the Indian currency affected the price of the imported input components, which became costlier. This affected the prices of the cylinders, where about 75% of the tubes that were used were imported.

Changes in Industry Structure The company was strong in the eastern region, and catered to the large and small automobile manufacturers there. However, it had a weak presence in southern and central India. The new companies that entered the market exploited this fact, and in this context, Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Challenges in the Adoption of IT at Sunrise Industries

467

a new competitor emerged in the southern part of the country. Some customers switched over, and the new company was able to set up a manufacturing base and get a dominant share in the market for hydraulic cylinders, in south India. In addition, one of the company’s major customers, an automobile manufacturing company, integrated backward and started producing its own tipping gears. In the northern part of India, there was one trading company that imported products in the semi-finished form and sold them after assembling. A number of foreign players also entered the market. Some of the existing companies entered into joint ventures with foreign majors. At the time of writing the case, the Indian auto component industry had about 225 active collaborations, out of which 67 were with Japan, 40 with the UK, 44 with Germany, 31 with the USA, and the rest with other countries. Several international automotive component manufacturers were also in the process of establishing production bases in India due to cost competitiveness, especially the availability of low-cost, skilled technical labour. The Marketing Manager at the time this study was conducted had also been the Marketing Manager during this period. He described the changed conditions in this manner: “Things started changing in the early 1990s. For the first time, we had a serious competitor in the southern region. They seemed to be more professional than us because our dealers started saying that if we could not deliver within the specific period, they would switch. Also the backward integration move by one of our largest competitors affected us considerably.” Consequent to these changes, the power of buyers increased because they had more choice and could dictate terms regarding quality and delivery time. Customers, who had earlier waited for six to seven months for a particular product, now insisted on receiving the same in one month or even less. The market changed from a monopoly to a fragmented one.

Organisational Response These conditions adversely affected the performance parameters of SIL. The company was hard-pressed to maintain its existing market share. It lost 15% market share to the new competitor in the southern part of the country. Information on the revenues and profits during this period is provided in Table 2. The pressures for change had become high during this period. Customers were asking for lower prices, better products, and shorter delivery times. The new entrants had modern technologies, efficient processes, and advanced IT infrastructures. Most of the existing companies, including SIL, operated old plants and had high cost and labour-intensive processes. Therefore, product quality was poor and rejection rates were high. Some Indian companies instituted changes to reduce costs and improve productivity. They entered into technological collaboration with foreign companies and adopted new advanced process technologies with strict quality controls. They also started to introduce IT in different areas of operations, most notably in the inventory management function. At SIL, the central leadership of the company responded to these changes by adopting an aggressive strategy for cost reduction. This was achieved by automating some processes that Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

468 Tarafdar & Vaidya

heavily used manual labour. Most of these functions involved the use of heavy transaction processing and hence IT was used to automate them. Simultaneously the workforce was downsized from 800 employees to 600 employees.

Adoption of IT for Transaction Processing Environmental and competitive pressures have been cited as significant drivers of IT adoption. Changes in technologies, demographic factors, and customer preferences have resulted in the adoption of IT for product enhancement and process innovation (Porter & Millar, 1985; Neo, 1988; Grover, 1993; King & Thompson, 1996; Tarafdar & Vaidya, 2002). Deregulation has changed the nature of competition in industries and has resulted in increased powers of customers, reduced entry barriers, and increased competition. This has resulted in the adoption of IT in organisations, for cost reduction, process differentiation, and other efficiency-enhancing measures (King & Thompson, 1994, 1996; Applegate, McFarlan, & McKenney, 1997). Likewise, external factors—such as deregulation—and competitive pressures have led to the adoption of IT in crucial processes in many developing countries, including India, Brazil, China, and those in Eastern Europe (Tarafdar & Vaidya, 2002; Albadvi, 2002; Li, Zhang, Sun, & Wang, 2002; Molla & Licker, 2002). Government policies have also been important factors affecting the adoption of IT in developing countries, particularly in the areas of providing the telecommunications infrastructure and framing industry legislation (Papazafeiropoulou, Pouloudi, & Doukidis, 2002). In SIL too, following the changes in industry structure and competitive pressures, there were some changes in the organisational focus towards IT. The top management realized that besides aiding in automation, IT could help significantly in the cost-cutting efforts. Therefore they decided to make some initial investments in IT-based transaction processing systems. In 1991, an IS function was introduced and put under the charge of the Production and Quality Control department. There were seven part-time data entry operators and one full-time programmer in the IS department at that time. The functions of the department included entry of data, development of simple databases and applications, and making modifications to them, on requests from the users, mostly from the Finance department. The IS head (who was also the Production Manager) reported to the Deputy Director and did not have authority to take crucial IT-related decisions independently. He followed the instructions of top management with regard to the procurement of hardware and development of software. He did not take any proactive decisions regarding use of IT for reducing costs and making processes more efficient. Moreover, he was not an IS professional by training and therefore did not have any knowledge of or expertise in IT. He did not interact positively and fruitfully with end users and line managers, and was not forthcoming with suggestions, training, and help. On the whole he just carried out instructions and did not make any significant contributions of his own because of limitations to his technical capabilities. The decision-making processes in the company remained strongly centralised. The organisational leadership had realised, with reluctance, that IT had some role to play in cost cutting and improving the performance of the company. In the initial phase of computerisation, three stand-alone PCs were installed. They were used for secretarial jobs like writing forms and letters. By 1995, the number of PCs had increased to six, and some other simple functions like printing of purchase orders, invoices, and goods receipt Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Challenges in the Adoption of IT at Sunrise Industries

469

notes were also performed through the computer. A database accounting and payroll package was developed. The accounting and payroll functions were therefore the first ones to be computerised. There was no LAN, and all these functions were performed on a stand-alone basis. Only those functions that interfaced with the finance function used computers. Simultaneously, a downsizing effort was implemented to reduce the number of employees from 800 to 600. This was a centralized, top management decision, and was implemented in a top-down manner. Studies have suggested that management mechanisms such as adequate communication programs, technology training, efforts for education, and awareness about benefits from IT should accompany the initial introduction of IT, in order to manage the organisational problems and issues associated with process changes, which often also include downsizing (Zuboff, 1988; Earl, 1989). At SIL, there were no such efforts made to communicate the rationale behind the force reduction, to the line managers and shop floor workers. This situation was all the more serious because most of the affected employees were clerical and engineering staff, who were not aware of the latest IT applications or the possibilities of the use of IT for process development and improvement. Consequently, the staff perceived the IT-based automation of the manual activities of transaction processing to be the direct and the most important cause of workforce reduction and unemployment. This resulted in resentment and, to some extent, active resistance towards IT. Some employees refused to operate the computers; many others did not use the systems willingly and had to be forced to do so. The clerks initially refused to enter data on the computer. An industrial relations problem was thus created. The IT adoption process was initiated by the company’s leadership under perceived compulsions because of the changed external and competitive conditions. This happened in spite of the top management’s bias against IT, and an overall organisational culture that was hostile towards IT. This case describes one of the first studies to explore this interaction between external and competitive factors, and factors internal to the organisation such as leadership characteristics and organisation culture, and their effect on IT adoption. At SIL, even though there was top management reluctance to adopt IT, the changes in the environment, competitive pressures, and the decline in the company’s performance finally resulted in the adoption of IT. It was apparent however that during this period the company was using IT for very basic and rudimentary transaction processing operations. It was in the Support Mode (McFarlan, McKenney, & Pyburn, 1983) or Delayed Sector (Earl, 1989). These two modes are often regarded as the first stages of IT adoption in organisations, where IT is not fundamentally essential for the smooth running of the operations of the company. In these organisations, IT is used to accomplish non-essential and non-critical tasks, and the IS department functions as a back room support department, with no participation in functions like strategic planning and implementation. In SIL too, none of the critical processes such as inventory control, production planning, and service and spares management were computerized or re-engineered using IT. Since the introduction of IT was accompanied by downsizing, there was large-scale opposition to IT adoption. Moreover, the IS organisation was structured such that it did not have any independent powers for decision making with regard to IT acquisition. Therefore, even though there was substantial investment in acquiring new IT, there was no direct impact of these

Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

470 Tarafdar & Vaidya

systems on process efficiency and product quality. Hence the consequent impact of IT on performance parameters such as market share, revenues, and profits was insignificant.

PHASE TWO: CHANGES IN THE ORGANISATIONAL ORIENTATION TOWARDS INFORMATION TECHNOLOGY—THE FACILITATING ROLE OF INFORMATION SYSTEMS PROFESSIONALS (1996-2000) Continuing Changes in the External and Competitive Environment, and Their Consequences In the late 1990s there was an economic recession, which further affected the company’s operations. This was because the company’ customers belonged to the core sector, whose operations were directly influenced by macroeconomic conditions. The performance of the company deteriorated along critical parameters. The revenues of the company decreased from Rs. 600 million in the mid-1990s to about 350 million in 1999 (refer to Table 2). Between 1995 and 1999, the company’s market share declined from 75% to 50% in tipping gears and from 35% to 15% in cylinders. Falling demand led to overcapacity. The production capacity for tipping gears was 1,000 sets a month, whereas the actual production was 300 to 500 sets a month. Similarly, the capacity for cylinders was 250 cylinders per month, whereas the actual production was 150 cylinders per month. There were increased demands on the stringency of product quality and on-time delivery. Quality became an important factor for the customers, because of the presence of superior products from competitors. Customers wanted delivery times of one month for tipping gears and two months for cylinders. Another problem was that of piling inventory. Inventory levels were very high. In 1996, the inventory levels were at Rs. 140 million, on an average; 50% of the raw material inventory was non-moving. Some of the items had not moved for more than one year. The production planning and inventory management functions were based on forecasts that were derived largely from qualitative data, and the experience of the company’s managers. The changes in the industry structure and external environment had fundamentally altered the nature of the industry. Hence the assumptions and the experiences which managers drew upon while calculating the forecasts had changed significantly. It was therefore required to introduce more systematic, efficient, up-to-date, and structured methods for calculating the marketing forecasts, prior to using them for planning production quantities.

Enterprise-Wide Adoption of IT—The Role of IS Professionals The performance of the company deteriorated further. There was a decline in market share, profits, and revenues. The industry press carried descriptions of how the newer companies in the industry had better planning, forecasting, production planning, and inventory control systems. Consequent to the decreased revenues and profits, and the Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Challenges in the Adoption of IT at Sunrise Industries

471

increased need for reducing costs, the Chairman and the Deputy Director realised that the company would have to use IT more fruitfully and to greater effect, for implementing new and efficient processes. However, they were still not very keen to invest in IT. They committed some organisational resources in terms of manpower and money, to the adoption of IT. That notwithstanding, they were quite sceptical about its capabilities and reluctantly made some changes in the IS organisation structure. Moreover they did not really understand the benefits that could be derived from IT. As before, the thrust of IT planning was generated at the level of the top management. In this context, the IS functions were de-coupled from the Production department and a new IS department was set up. An IS manager was recruited in 1995, with the expectation that IT would be used to improve certain critical operations of the company. The new IS manager reported to the Deputy Director (refer to Figure 1). He had extensive prior experience in the implementation and use of IT-based manufacturing resource planning applications, and a good knowledge of current IT trends and applications in that area. He was quickly able to identify areas where IT could yield benefits, and developed an overall strategy for developing and implementing new applications in those areas. The plan included details of how applications would be developed, the hardware and software platforms which would be used, and details about the budgetary implications. The IS manager was a technically capable and politically adroit person, and also had a good knowledge about the use of IT in the industry. Various studies have explored the role of IS professionals in influencing the adoption of IT. IS professionals have a positive impact on IT adoption in the organisation when they are technically aware of the possibilities from IT, are competent in developing new IS and maintaining existing IS, and are capable of promptly solving end user needs (Swanson, 1994; Dvorak et al., 1994; Al-Khaldi & Wallace, 1999). At SIL, through his expert power and interpersonal skills, the IS manager was able to slowly convince the leaders about the necessity of deploying IT and developing applications for the crucial processes of the company. Most importantly he was able to acquire the necessary funds for implementing his strategic IT plan. He hired five system analysts and programmers to staff the IS department and initiate development of applications. Seven part-time data entry operators also worked in shifts. The company invested in five PCs, word processing and accounting applications, and in setting up supporting infrastructure for a new IS department. As is clear from the above description, the case illustrates a new dimension of the role of IS professionals in driving IT adoption. This is the potential ability of the IS personnel to drive IT decisions, through their intermediate influence, education, and persuasion of top management. As a consequence of the changed attitude of the top management, the systems manager was given significant authority for implementing IT applications. There was a sharp increase in the responsibilities of the IS department, which was now responsible for the operational and tactical details of the implementation processes for the various applications that were being developed. Its duties included interfacing with user departments to find out their requirements, conceiving and designing the required solutions, programming and application development, planning and supervising the implementation, maintenance, and training of end users. Various authors have suggested that the adoption of IT creates changes in organisations through decentralisation (Leavitt & Whisler, 1958), by changing the

Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

472 Tarafdar & Vaidya

nature of work (Zuboff, 1988) and by making the role of middle management less relevant (Markus & Robey, 1994). This case illustrates some additional aspects of IT-enabled organisational change. To begin with, the importance of the IS function increased significantly. The IS manager became an important member of the IS planning team, and soon earned the respect and support of the other senior managers, partly because of his competence and partly because of his good relations with the Deputy Director. Second, because of the influence and efforts of the IS Manager, there was a change in their attitude and they started accepting IT as a part of their processes and operations. They worked closely with the IS manager in specifying user requirements and consulted him for ways in which they could incorporate IT in their functions. Third, there was some increase in the awareness of other line managers, shop floor workers, and end users of the possible benefits from IT; they became relatively more agreeable to the changes due to computerisation. These changes in attitude were evident in the response of a senior manager, the head of the production function, when he said, “We do what he tells us to do. We expect him to come to us with suggestions of what can be done.” Another instance of the validation of the extent to which the inclination of the top management had changed was evidenced by the following remark, made by the chief financial manager, who was a powerful member of the top management team: “We are very enthusiastic about what we think IT can do for our company. We would not stop at anything, to get what benefits we can, out of IT.”

Details of Applications that Were Adopted As a result of the efforts of the IS manager, substantial changes were effected in the organisational focus towards IT, in terms of investment and the criticality of the new applications. IT deployment efforts had hitherto been focussed towards the automation of transaction processing for operations that involved heavy manual calculations. As a result of the new initiative for enterprise-wide deployment of IT, there was a thrust towards using IT for improving critical operational parameters. The objective was to develop applications that would help to reduce inventory-carrying costs, improve the cycle time of processes, and reduce the overall delivery time. The company thus made a transition from the Support mode into the Turnaround mode (McFarlan et al., 1983), and there was a change in the operational and strategic significance of the new systems that were being developed. The transition could also be described as being one from the Delayed Sector into the Dependent Sector (Earl, 1989) where the strategy of the company was becoming increasingly dependent on IT. Simultaneously, the degrees of infusion and diffusion (Sullivan 1985) also increased. To achieve this, the managers of the different departments perceived a need for systematic information flow across departments and integration across functions. To this end, an integrated package was developed, which linked the finance, production, materials management, and purchase functions. Goods receipt, accounts payables, inventory management, production indenting, goods dispatch, accounts receivables, and spares invoicing processes were computerised. Some of these processes were also redesigned. This was done after discussions between the IS manager and the departmental heads, with subsequent validation by the Deputy Director. The hardware for the integrated system consisted of a Windows NT-based LAN with 51 nodes. The front ends were Windows or DOS-based 486 or Pentium PCs. The Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Challenges in the Adoption of IT at Sunrise Industries

473

applications were written in FoxPro and the main database was housed in an Intel-based server. The software had different modules for goods receipt, goods dispatch, production indent, field complaints, incoming inspection, accounting, payroll, and interdepartmental communication. All the modules were integrated and used the same database. The software was used to perform all the important functions, and consequently the company’s dependence on computers increased dramatically. The functions that could not be carried out without computers included goods receipt and dispatch, production, financial accounting, purchasing, production planning, sales projection and demand forecasting, raw materials requirements planning, inventory tracking, and quality control. Investment in IT increased significantly between 1996 and 1999. The company procured hardware (servers, PCs, networking hardware) and software (LAN software and some applications) worth INR 30,00,000. There were also a lot of intangible investments in terms of managerial time spent on giving inputs to the IS professionals in developing applications and on end user training. The investment was significantly higher than what it had been in previous years.

Overcoming Organisational Resistance Even though the top management had changed their inclination towards IT deployment, there was still strong resistance among the junior employees and end users. They were still not completely aware of the benefits from IT and even now associated the adoption of IT with unemployment. Therefore they were not favourably inclined towards IT deployment. Researchers have suggested that the management of IT should be contingency based, and that organisations in different stages of their evolution process should adopt IT management practices relevant to the criticality of the use of IT in their businesses (Earl, 1989; Applegate et al., 1997). For instance, Turnaround or Dependent organisations benefit from innovation management practices such as resource commitment to acquiring IT, guidance and direction in applications development, and encouragement for IT-based innovation (Rockart, 1988; Earl, 1989). In this context, as the criticality of IT for the company increased, the General Managers of the different departments, along with the IS manager, adopted relevant measures to attempt to manage the increased importance of the role of IT. Once an application had been decided upon and designed by the IS department, the head of the concerned user department would make himself personally accountable for the implementation and use of that system. If an application affected more than one department, the departmental heads coordinated with each other, with technical support and training from the IS department. End users, shop floor workers, and staff were educated about the potential benefits from IT in general, and about the relevance of IT for SIL specifically, given its inefficient processes. Further, they were trained in the applications and their technical problems were promptly addressed by the IS department. The resistance of the workers was therefore neutralised to some extent. According to the IS manager: “The departmental heads come to us about the problems that they think could be solved by the use of IT. We also work with them to provide technical training to end users and to educate them about IT in general.” Once the enterprise-wide system had been installed and started being used, the IT deployment during the years 1996 to 1999 had the following benefits:

Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

474 Tarafdar & Vaidya

(a) (b) (c) (d) (e)

Overhead costs reduction of 50%. Cycle time reduction of some of the key processes by more than 40%. Delivery time reduction of 20%. Elimination of data duplication. Reduction of inventory costs from INR 13.5 million to INR 4.2 million; 25% of the fast-moving inventory was stored on a day-to-day basis, the rest was kept for one month.

The head of the finance department observed that, “We are very happy that the inventory cost, which was one of our major cost items, has decreased with the introduction of this system.”

CURRENT CHALLENGES AND PROBLEMS (2001 AND BEYOND) At the time this study was conducted, the integrated enterprise system had been in use for about two years. Although it was used for all of the critical operations, the level of acceptance of IT as an essential process tool was still quite low. Most of the staff used the system only because they had to. In 2000, there was a change in top management and a new Deputy Director took office. He aggressively strengthened the drive towards cutting costs and tried to look for additional areas in which fiscal austerity could be introduced. He closely monitored all functional areas and insisted on elaborate justification for all cost components, so much so that he started interfering with the functions of the departmental heads. In an organisation where centralisation was already a strong force in the overall decision-making structure, these measures were strongly resented. Most senior managers considered them as direct threats to the already limited control they had over their functions. The General Manager of the Marketing department and the Manager of the Systems department resigned. The systems Manager remarked that: “The new measures for cost control were extreme. It was difficult to drive IT adoption, effectively re-design processes, and introduce cultural changes under such close supervision and budgetary restrictions A number of the senior managers found it extremely uncomfortable.” During his tenure the IS Manager had started the process of addressing significant organisational issues that had initially prevented the adoption and effective use of IT. This process stalled after he resigned. The resignation of the Manager of the Systems department therefore posed significant challenges for SIL. The first issue was continued top management indifference towards IT. The Chairman and the Deputy Director were initially reluctant to commit resources for acquisition of IT. The IS manager was able to change their attitude towards IT adoption. He was able to convince them of his capabilities for instituting and leading a program for the adoption of IT in the significant areas of the business. More importantly, he had also persuaded them that given the changed external and competitive conditions, such an effort was crucial to the survival of the company. Thus, he was able to acquire the initial funds for the initiative. However, once he left, the initial momentum that had been Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Challenges in the Adoption of IT at Sunrise Industries

475

generated was not sustained. Similar instances in other developing countries, where leadership support in the early stages of IT adoption did not carry through to the implementation stages and beyond, have also been reported in Barrett and Walsham (1995). The second issue was concerned with the relations between the central organisational leadership and the line management, that is, the heads of the different departments. This was important to the continued development and use of information systems at Sunrise Industries, because while the top management decided the broad thrust and direction of IT deployment, it was the departmental heads and line managers who managed the IT deployment process. It was necessary to institute mechanisms whereby there would be regular communication between them. This was necessary for top management in order to be able to explain the reasons behind the thrusts towards development of new systems. It was also required so that line managers could explain and describe their problems and experiences with the new systems. This aspect of IT adoption has not been addressed in literature and opens up interesting areas for further research. The third obstacle to IT adoption was related to the attitude of shop floor workers, clerical staff, and other end users towards IT use. While the support of top management was crucial to the initial funding and resource allocation, it was important to secure the commitment of end users, so that the systems that were developed would actually be used, and the benefits obtained. In this context, end user attitudes are recognized as important factors that influence the adoption of IT (Vaidya, 1991; Agarwal, 1998; Robey & Boudreau, 1999), and Earl (1989) has mentioned that management strategies in the Dependent Sector and the Factory Stage (McFarlan et al., 1983) should address the issue of end user education and support. This was an area of concern for the further development and use of information systems at SIL, because although the clerical staff and end users did use the applications, they were still not proactive about IT use. They used computers because they had to and were not naturally inclined towards and did not feel comfortable about performing IT-mediated tasks and processes. Also they did not proactively give any feedback about their problems and suggestions about the system. At the same time, there were significant opportunities facing SIL. According to the Automotive Component Manufacturer’s Association, the production of automobiles was estimated to grow at a cumulative annual growth rate of 10% between 2001 and 2005. This augured well for the ancillary sector, whose demand growth was around 12% in 20002001. The ancillary industry, however, was changing such that IT had become an intrinsic part of functions such as supply chain management and materials management. The industry as a whole was moving towards a higher level of IT use and infrastructure. Such industry-specific development of IT infrastructure is a characteristic of IT development in developing nations, as they go through successive stages of IT adoption as a whole (Watson et al., 1997). Some companies were also using IT in other critical functions such as Customer Relationship Management. The resignation of the IS Manager was a setback in the organisation’s efforts towards IT adoption. The existence of extreme measures for cost cutting, as instituted by the new Deputy Director, further complicated issues. At Sunrise Industries, so far it had been a case of persuaded or forced administration of IT by the IS function, both to the leaders and to the end users. There was now a need for the company to develop a systematic process for making decisions with regard to strategic investments in IT and the continued implementation of new IT. In absence of such a structured and concerted effort towards IT adoption and use, the company risked Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

476 Tarafdar & Vaidya

getting left behind by newer competitors that had advanced IT capabilities and a greater appreciation of the benefits from IT.

ENDNOTES 1 2

The company’s name has been altered to ensure confidentiality. US$1 = 47 INR, approximately.

ACKNOWLEDGMENT The authors would like to thank the reviewers for their suggestions and comments, which have greatly enhanced this manuscript.

REFERENCES Agarwal, R., & Prasad, J. (1998). The antecedents and consequents of user perceptions in information technology adoption. Decision Support Systems, 22(1), 15-29. Al-Khaldi, M.A., & Wallace, R.S.O. (1999). The influence of attitudes on personal computer utilisation among knowledge workers: The case of Saudi Arabia. Information and Management, 36(4), 185-204. Applegate, L., McFarlan, F.W., & McKenney, J.L. (1997). Corporate information systems: Text and cases. Englewood Cliffs, NJ: Prentice-Hall International. Automobile Ancillary Industry in India. Retrieved December 22, 2002, from the World Wide Web at: http://www.indiainfoline.com/sect/auan/cont.html. Barrett, M., & Walsham, H. (1995). Managing IT for business innovation: Issues of culture, learning, and leadership in a Jamaican insurance company. Journal of Global Information Management, 3(3), 4-13. Delbecq, A.L., & Mills, P.K (1985). Managerial practices that enhance innovation. Organisational Dynamics, 14(1), 24-34. Dvorak, R., Dean, D., & Singer, M. (1994). Accelerating IT innovation. The McKinsey Quarterly, (4), 123-135. Earl, M.J (1989). Management strategies for information technology. London: PrenticeHall. Galbraith, J. (1973). Designing complex organisations. Reading, MA: Addison-Wesley Publishing Company. Grover, V. (1993). An empirically derived model for the adoption of customer-based interorganisational systems. Decision Sciences, 24(3), 603-639. Jantavongso, S., & Li, K.Y.R. (2002). E-business in Thailand: Social and cultural issues. In M. Khosrow-Pour (Ed.), Issues and trends of IT management in contemporary organisations. Proceedings of Information Resources Management Association Conference (pp. 443-446), Seattle, May. King, W.R., & Thompson, S.H. Teo. (1994). Facilitators and inhibitors for the strategic use of information technology. Information and Management, 27(2), 71-87.

Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Challenges in the Adoption of IT at Sunrise Industries

477

King, W.R., & Thompson, S.H. Teo. (1996). Key dimensions of facilitators and inhibitors for the strategic use of information technology. Journal of Management Information Systems, 12(4), 35-53. Leavitt, H., & Whisler, T. (1958). Management in the 1980s. Harvard Business Review, (36), 41-48. Li, Q., Zhang, X., Sun, C., & Wang, S. (2002). Strategies of securities electronic commerce in China—implications of comparative analyses between China and other countries. In M. Khosrow-Pour (Ed.), Issues and trends of IT management in contemporary organisations. Proceedings of Information Resources Management Association Conference (pp. 1080-1083), Seattle, May. Markus, M.L., & Robey, D. (1994). Information technology and organisational change: Causal structure in theory and research. Management Science, 35(4), 583-598. McFarlan, F.W., McKenney, J.L., & Pyburn, P. (1983). The information archipelago— plotting a course. Harvard Business Review, 61(1), 145-156. Molla, A., & Licker, P.S. (2002). PERM: A model of e-commerce adoption in developing countries. In M. Khosrow-Pour (Ed.), Issues and trends of IT management in contemporary organisations. Proceedings of Information Resources Management Association Conference (pp. 527-530), Seattle, May. Nambisan, S. (1999). Organisational mechanisms for enhancing user innovation in information technology. MIS Quarterly, 23(3), 365-395. Neo, B.S. (1988). Factors facilitating the use of information technology for competitive advantage. Information and Management, 15(4), 191-201. Papazafeiropoulou, A., Pouloudi, A., & Doukidis, G. (2002). Electronic commerce policy making in developing regions: The case of South Eastern Europe. In M. KhosrowPour (Ed.), Issues and trends of IT management in contemporary organisations. Proceedings of Information Resources Management Association Conference (pp. 600-604), Seattle, May. Porter, M.E., & Millar, V.E. (1985). How information gives you competitive advantage. Harvard Business Review, volume, 149-160. Premkumar, G., & Roberts, M. (1999). Adoption of new information technologies in rural small businesses. Omega, International Journal of Management Science, 27(4), 467-484. Robey, D., & Boudreau, M. (1999). Accounting for the contradictory organisational consequences of information technology: Theoretical implications and methodological dimensions. Information Systems Research, 10(2), 167-197. Rockart, J.F (1988). The line takes the leadership—IS management in a wired society. Sloan Management Review, 29(4), 57-64. Sullivan Jr., C.H. (1999). Systems planning in the Information Age. Sloan Management Review, 27(2), 3-11. Sutcliffe, N. (1999). Leadership behaviour and business process reengineering (BPR) outcomes: An empirical analysis of 30 BPR projects. Information and Management, 36(5), 273-286. Swanson, E.B (1994). Information systems innovation in organisations. Management Science, 40(9), 1069-1091. Tarafdar, M., & Vaidya, S.D. (2001). Challenges in the deployment of e-commerce technologies—the role of organisational factors. In Altinkemer, K., & Chari, K.

Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

478 Tarafdar & Vaidya

(Eds.), Proceedings of the 6th INFORMS Conference of Information Systems and Technologies, Miami, November. Tarafdar, M., & Vaidya, S.D. (2002). Evolution of the use of IT for e-business at Century Financial Services: An analysis of internal and external facilitators and inhibitors. Journal of IT Cases and Applications, 4(4), 49-76. Tarafdar, M., & Roy, R. (2003). Analysing the adoption of Enterprise Resource Planning systems in Indian organisations: A process framework. Journal of Global Information Technology Management, 6(1), 31-51. Vaidya, S.D. (1991). End user computing—an Indian perspective. Proceedings of the Indian Computing Congress (pp. 533-541), December 26-29. Weick, K.E. (1979). The social psychology of organizing (2nd Edition). Reading, MA: Addison-Wesley Publishing Company. Zuboff, S. (1988). In the age of the smart machine—the future of work and power. City: Basic Books.

BIOGRAPHICAL SKETCHES Monideepa Tarafdar is Assistant Professor at the University of Toledo, Toledo, Ohio. She has an undergraduate degree in Physics, and a graduate degree in Telecommunications and Electronics Engineering from the University of Calcutta, India. Her doctoral degree is from the Indian Institute of Management Calcutta. Her current research and teaching interests are in the areas of strategic information systems management, management of IT, enterprise systems, and organisational aspects of IS. Her teaching has been in the areas of management information systems, data management, data communications and e-commerce. Her research has appeared in Journal of Information Technology Cases and Applications, Journal of Global Information Technology Management, and System Dynamics: An International Journal of Policy Modelling. Sanjiv D. Vaidya is currently Associate Professor with the Management Information Systems Group at the Indian Institute of Management Calcutta, India. He holds a BTech. degree in Electrical Engineering from the Indian Institute of Technology Bombay, and an MBA and a doctorate from the Indian Institute of Management Calcutta. He has spent several years in Indian industry and has held positions in the operations and IT functions. He has also worked as a Principal Advisor on strategy matters for a leading IT organisations in India. Professor Vaidya’s research interests include: approaches & processes for information systems strategy formulation, impact of IT on organisations, end user computing, DSS & knowledge management, and electronic business. His research work has been primarily of the theory-building type. He has published in Indian and international conferences, and authored the book, Strategic Use of Information Technology. He teaching interests are IS/IT strategy & management, and e-business strategies. He also participates extensively in training corporate executives.

Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.

Challenges in the Adoption of IT at Sunrise Industries

479

APPENDIX History of IT Adoption at Sunrise Industries Case Description – 1996 to 2000 Case Description – 1992 to 1995 Setting the Stage- 1985 to 1991 Minimum Use of IT, in fact no use of IT. There was no separate IT department

1992-Changes in regulation

Reluctant IT investment by top managers. IT was used in relatively less critical and routine functions such as payroll processing and accounting. Support Mode (McFarlan et al 1893), Delayed Sector (Earl 1989)

Changes in the responsibilities of the IS function. Recruitment of a new IS manager The IS manager took the lead in implementing new IT applications Enterprise wide adoption of an integrated IT application Factory Mode (McFarlan et al 1893), Dependent Sector (Earl 1989)

1996- Changes in the power and focus of the IS function Turnaround Mode (McFarlan et al 1893),

Current Challenges and Problems- 2001 and beyond Continued education of top management Effective communication between top management and departmental heads Training, attitude change and education of shop floor workers and clerical staff

Growth in the automobile sector and the resulting opportunities for Sunrise Industries Increased budgetary controls

Copyright © 2004, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.